Classifying Cash Flows
The company provided the following information:
a. Cash sales for the year were $50,000; sales on accounttotalled $60,000
b. Cost of goods sold was $55,000
c. All inventory is purchased on account
d. Depreciation on building was $31,000 for the year
e. Depreciation on equipment was $2,000
f. Cash collections of accounts receivable were $38,000
g. Cash payments on accounts payable for inventory equaled$39,000
h. Rent expense paid in cash was $11,000
i. 20,000 shares of common stock were issued for $240,000 incash
j. Land valued at $106,000 was acquired in exchange for signinga mortgage note payable
k. Equipment was purchased for cash at a cost of $84,000
l. Dividends of $46,000 were declared but not yet paid
m. $15,000 of dividends that had been declared the previous yearwere paid in cash
n. Interest totaling $16,000 was paid in cash during theyear
o. A machine used on the assembly line was sold for $12,000 incash. The machine had a book value of $7,000
p. On January 1, the company entered into an operating lease tosecure the use of a building having a cash price of $200,000. Thefirst lease payment of $19,000 in cash was made on January 1.
1. Compute cash from operating activities.
2. Compute cash from investing activities.
3. Compute cash from financing activities.
Classifying Cash Flows
The company provided the following information:
a. Cash sales for the year were $50,000; sales on accounttotalled $60,000
b. Cost of goods sold was $55,000
c. All inventory is purchased on account
d. Depreciation on building was $31,000 for the year
e. Depreciation on equipment was $2,000
f. Cash collections of accounts receivable were $38,000
g. Cash payments on accounts payable for inventory equaled$39,000
h. Rent expense paid in cash was $11,000
i. 20,000 shares of common stock were issued for $240,000 incash
j. Land valued at $106,000 was acquired in exchange for signinga mortgage note payable
k. Equipment was purchased for cash at a cost of $84,000
l. Dividends of $46,000 were declared but not yet paid
m. $15,000 of dividends that had been declared the previous yearwere paid in cash
n. Interest totaling $16,000 was paid in cash during theyear
o. A machine used on the assembly line was sold for $12,000 incash. The machine had a book value of $7,000
p. On January 1, the company entered into an operating lease tosecure the use of a building having a cash price of $200,000. Thefirst lease payment of $19,000 in cash was made on January 1.
1. Compute cash from operating activities.
2. Compute cash from investing activities.
3. Compute cash from financing activities.
Related questions
XS Supply Company is developing its annual financial statementsat December 31, current year. The statements are complete exceptfor the statement of cash flows. The completed comparative balancesheets and income statement are summarized:
| Current Year | Prior Year | ||||||
| Balancesheet at December 31 | |||||||
| Cash | $ | 36,900 | $ | 29,900 | |||
| Accounts receivable | 39,800 | 31,800 | |||||
| Merchandise inventory | 44,000 | 41,000 | |||||
| Property and equipment | 126,100 | 103,300 | |||||
| Less: Accumulateddepreciation | (34,700 | ) | (27,300 | ) | |||
| $ | 212,100 | $ | 178,700 | ||||
| Accounts payable | $ | 40,700 | $ | 32,100 | |||
| Wages payable | 3,700 | 4,100 | |||||
| Note payable, long-term | 48,000 | 55,100 | |||||
| Contributed capital | 94,900 | 74,900 | |||||
| Retained earnings | 24,800 | 12,500 | |||||
| $ | 212,100 | $ | 178,700 | ||||
| Income statement forcurrent year | |||||||
| Sales | $ | 139,000 | |||||
| Gain on sale of equipment | 3,000 | ||||||
| Cost of goods sold | 89,000 | ||||||
| Other expenses | 40,700 | ||||||
| Net income | $ | 12,300 | |||||
Additional data:
Bought equipment for cash, $35,800. Sold equipment with originalcost of $13,000, accumulated depreciation of $10,000, for $6,000cash.
Paid $7,100 on the long-term note payable.
Issued new shares of stock for $20,000 cash.
No dividends were declared or paid.
Other expenses included depreciation, $17,400; wages, $13,900;taxes, $6,900; and other, $2,500.
Accounts payable includes only inventory purchases made oncredit. Because there are no liability accounts relating to taxesor other expenses, assume that these expenses were fully paid incash.
Required:
1. Prepare the statement of cash flows for theyear ended December 31, current year, using the indirect method.(List cash outflows as negative amounts.)
Presented below are the financial statements of NoskerCompany.
NOSKER COMPANY | ||||||
Assets | 2014 | 2013 | ||||
| Cash | $35,010 | $20,740 | ||||
| Accounts receivable | 32,070 | 18,800 | ||||
| Inventory | 26,880 | 20,670 | ||||
| Equipment | 59,560 | 77,390 | ||||
| Accumulated depreciationâequipment | (29,580 | ) | (23,200 | ) | ||
| Total | $123,940 | $114,400 | ||||
Liabilities and Stockholdersâ Equity | ||||||
| Accounts payable | $28,050 | $ 16,770 | ||||
| Income taxes payable | 7,120 | 8,100 | ||||
| Bonds payable | 26,560 | 32,960 | ||||
| Common stock | 18,400 | 13,670 | ||||
| Retained earnings | 43,810 | 42,900 | ||||
| Total | $123,940 | $114,400 | ||||
NOSKER COMPANY | ||
| Sales revenue | $241,860 | |
| Cost of goods sold | 175,230 | |
| Gross profit | 66,630 | |
| Operating expenses | 24,730 | |
| Income from operations | 41,900 | |
| Interest expense | 3,490 | |
| Income before income taxes | 38,410 | |
| Income tax expense | 7,430 | |
| Net income | $30,980 | |
Additional data:
| 1. | Dividends declared and paid were $30,070. | |
| 2. | During the year equipment was sold for $8,440 cash. Thisequipment cost $17,830 originally and had a book value of $8,440 atthe time of sale. | |
| 3. | All depreciation expense, $15,770, is in the operatingexpenses. | |
| 4. | All sales and purchases are on account. |
Further analysis reveals the following.
| 1. | Accounts payable pertain to merchandise suppliers. | |
| 2. | All operating expenses except for depreciation were paid incash. |
Presented below are the financial statements of NoskerCompany.
NOSKER COMPANY | ||||||
Assets | 2014 | 2013 | ||||
| Cash | $35,350 | $20,540 | ||||
| Accounts receivable | 32,030 | 19,280 | ||||
| Inventory | 26,330 | 20,170 | ||||
| Equipment | 59,700 | 77,740 | ||||
| Accumulated depreciationâequipment | (29,170 | ) | (23,220 | ) | ||
| Total | $124,240 | $114,510 | ||||
Liabilities and Stockholdersâ Equity | ||||||
| Accounts payable | $28,500 | $ 16,570 | ||||
| Income taxes payable | 7,360 | 8,400 | ||||
| Bonds payable | 27,750 | 32,280 | ||||
| Common stock | 18,490 | 14,690 | ||||
| Retained earnings | 42,140 | 42,570 | ||||
| Total | $124,240 | $114,510 | ||||
NOSKER COMPANY | ||
| Sales revenue | $241,740 | |
| Cost of goods sold | 176,380 | |
| Gross profit | 65,360 | |
| Operating expenses | 24,550 | |
| Income from operations | 40,810 | |
| Interest expense | 2,370 | |
| Income before income taxes | 38,440 | |
| Income tax expense | 8,140 | |
| Net income | $30,300 | |
Additional data:
| 1. | Dividends declared and paid were $30,730. | |
| 2. | During the year equipment was sold for $7,800 cash. Thisequipment cost $18,040 originally and had a book value of $7,800 atthe time of sale. | |
| 3. | All depreciation expense, $16,190, is in the operatingexpenses. | |
| 4. | All sales and purchases are on account. |
Further analysis reveals the following.
| 1. | Accounts payable pertain to merchandise suppliers. | |
| 2. | All operating expenses except for depreciation were paid incash. |
Prepare a statement of cash flows for Nosker Company using thedirect method.
